A lighter look at economics

Former labor official speaks about election year issues


— Steve Hofman is smiling in the frown-filled galaxy of the economic debate.

"I think the most important thing to know is that, basically, I'm an optimist," the former U.S. assistant secretary of labor told local businesspeople Thursday. "I think tomorrow is better than today. : But I'm also a bit of a realist."

Hofman spoke at Vectra Bank's first local Business for Breakfast event at the Steamboat Grand Resort Hotel. The subject: the economic impact of November's presidential election on Routt County.

The topic was heavy, but Hofman, who moved to Steamboat Springs in December, delivered his words with a light touch.

"Every once in a while, it's nice to do something like this to remember that you're more than your wife's mopey husband and your children's out-of-date dad," Hofman said.

Although he held his Labor Department post under former President George H. W. Bush, Hofman said he wanted to keep his talk nonpartisan. He didn't meander into political proselytizing, addressing the state of the economy as well as what history can tell Americans about Republicans' and Democrats' likely actions.

The nation is probably in a recession, Hofman said, which often is defined as two successive quarters of negative economic growth.

"The thing about a recession is that once people start talking about them, we're already in them," he said. "And once people start really talking about it, we're coming out of it."

One difficulty is that unemployment lags behind recovery, he said, which means the jobless rate often continues to rise after the economy picks back up.

Hofman said voters should pay attention to candidates' talking points on the economy and beyond.

"One thing I know about the election is if you don't talk about an issue in the campaign, you don't get any political capital to do anything about it," Hofman said.

He said he has looked at economic policy during the past 35 years to nail down the implications of this election. The records of Democrats and Republicans, not campaign promises, indicate what is likely to occur, he said.

Hofman's findings:

- Republicans tolerate higher unemployment rates than Democrats.

- Democrats tolerate more inflation than Republicans.

- Republicans try harder than Democrats to defend the value of the dollar.

- Democrats spend more federal dollars than Republicans.

He predicted that Arizona Sen. John McCain, a Republican, would push for a smaller government and less spending. Hofman said Democratic Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois would prefer more government-led solutions to economic problems, which would probably result in more government spending.

But politicians aren't bad folks, he said.

"At the end of the day, they all really want to do the right thing," Hofman said.

Hofman brought his talk back to Steamboat and Routt County. Because the dollar is weak and European currencies are strong, the area should encourage foreign investment and tourism, he said.

He added that Steamboat should not be fooled into thinking it is above the economic storm.

"I think it's a mistake to look out the window, see cranes and think the economy is great here," Hofman said. "Those cranes are a bet on tomorrow."


seabirth 9 years ago

"Republicans try harder than Democrats to defend the value of the dollar"

seems odd considering the state of the dollar right now and who has been in charge for the majority of the past 8 years.


seabirth 9 years ago

and yet during the last period the fed increased the rates (2004-2006), the value of the dollar fell.

http://www.federalreserve.gov/releases/h10/hist/dat00_ca.htm http://www.moneycafe.com/library/fedfunds.htm

this certainly has been a lighter look at economics.


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